EMPLOYEE BENEFITS

AND

OTHER EMPLOYMENT MATTERS ALLOCATION AGREEMENT

THIS EMPLOYEE BENEFITS AND OTHER EMPLOYMENT MATTERS ALLOCATION AGREEMENT (this "Agreement") is made and entered into as of December 31, 1998, by and between GRAND CASINOS, INC., a Minnesota corporation ("Company"); and LAKES GAMING, INC., a Minnesota corporation and wholly owned subsidiary of Company ("Lakes"); and shall be effective as of the Distribution Date (as hereinafter defined).

RECITALS

WHEREAS, Company, through certain wholly-owned subsidiaries, (a) owns, operates and develops certain gaining and resort facilities located in the State of Mississippi (as more specifically described herein, the "Mississippi Business"), and (b) manages and develops certain gaming facilities located outside the State of Mississippi (as more specifically described herein, the "Non Mississippi Business");

WHEREAS, it is necessary to separate the Mississippi Business from the Non-Mississippi Business in order to satisfy conditions precedent contained int hat certain Agreement and Plan of Merger dated June 30, 1998 (the "Merger Agreement"), by and among Company; Lakes; Hilton Hotels Corporation, a Delaware corporation ("Hilton"); Park Place Entertainment Corporation, a Delaware corporation and a wholly-owned subsidiary of Hilton ("Park Place"); and Gaming Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Park Place ("Merger Sub"), providing for the merger of Merger Sub with and into Company (the "Merger");

WHEREAS, subject to Company shareholder ratification and certain other conditions, the Board of Directors of Company has determined that the separation of the Non-Mississippi Business from the Mississippi Business shall be accomplished by distributing all of the issued and outstanding shares of common stock, par value$.01 per share, of Lakes (the "Lakes Common Stock") to the holders as of the Record Date (as hereinafter defined) of common stock, par value $.01 per share, of Company (the "Company Common Stock") on a pro rata basis immediately before the Merger, in the ratio of one (1) share of Lakes Common Stock for each four (4) shares of Company Common Stock held by such holders (the "Distribution");

WHEREAS, as set forth in the written Distribution Agreement between the parties, of even date herewith (the "Distribution Agreement"), and subject to the terms and conditions thereof, Company will contribute to Lakes, prior to the Distribution, all of the operations, assets and liabilities of the Non-Mississippi Business and such other assets, liabilities and operations as are described in the Distribution Agreement; and

WHEREAS, pursuant to, and as contemplated by, the Distribution Agreement, Company and Lakes have agreed to enter into an agreement allocating responsibilities with respect to certain matters relating to employees and employee compensation, benefits, labor and certain other employment matters pursuant to the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants, agreements, undertakings and obligations set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

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